It’s almost time to submit your income tax return (ITR) for the fiscal year 2021–2022 (FY22). For salaried taxpayers and non-auditable situations, the yearly ITR is due on July 31.
But for all those who failed to file their taxes by July 31, 2022, may still do so. And this comes with a catch as such taxpayers will be subject to a fine. Other expenses related to filing ITRs late or after due date would also exist.
The last day to file an ITR for the AY 2022–2023 for taxpayers whose accounts do not require auditing was July 31, 2022 as mentioned before

What to keep in mind while filing a belated ITR?

Assesses must file belated ITRs under Section 139(4) of the Income Tax Act, 1961. This process is the same as filing an ITR before the due date. While filing belated ITRs, taxpayers must ensure that they select Section 139(4) in the tax return form and that the applicable penalty amount, penalty interest and taxes due are paid. Under Section 234F of the Income Tax Act, a penalty of ₹5,000 is levied on assesses filing their belated ITRs. However, small taxpayers showing taxable income of up to ₹5 lakh must pay only ₹1,000 as penalty. This late filing fee must be deposited before one starts the process of filing a belated ITR. If any income tax is owed at the time of filing the late ITR, penal interest will be assessed. If self-assessment and advance tax are due at the time of filing, it is calculated at 1 percent per month.

Who Should file ITR?

Every individual must file the return of income if his total income (including income of any other person in respect of which he is assessable) without giving effect to the deductions under section 80C to section 80U, exceeds the maximum amount which is not chargeable to tax, i.e., exceeds the exemption limit of Rs. 2,50,000 for an individual; Rs. 3,00,000 in case of senior citizen and Rs. 5,00,000 in case of super senior citizen.

Why Filing of a tax return in India is important?

Income Tax Department obligates certain eligible persons to file their income tax return once in a year. Filing of Income Tax Return will legalize the earnings and investments credited in the bank account or any other mode of receipt and it is mandatory to disclose the same to avoid legal proceedings from the income tax department which may lead to heavy penalties and prosecution. Also, by filing your Income Tax Return you can get an income tax refund if you have paid excessive taxes to the government. Benefits of filing Income Tax Returns are as follows:

• Refund: Any amount paid in excess or deducted excessively in the form of Advance Tax/ TDS shall be claimed as a refund based on the TDS returns filed by the person deducting TDS.
• Applying for Visa: For travelling abroad, foreign consulates of many countries ask you to furnish last 3 years’ income tax returns or current year’s income tax return. Absence of any return can reduce the chances of you getting a visa specially under the visitor, investor, and work permit category.
• Eligibility in Loan Application: Income Tax Returns of the last three years is one of the basic documents required for loans in addition to the project report or projected financial statements. This helps banks in judging your pay back capacity.
• Funding requirement from investors: Raising funds from Venture Capitalists requires you to have income tax returns filed till date ready. Many investors study your business scalability, profitability, and other cost parameters from your business income tax return.

• Obtaining Government Tender: Sometimes, furnishing the income tax return is a must to apply for government tenders especially when tender of high value is being awarded.

• Credit Card Application: Filing of income tax return helps to apply for credit card with high overdraft limit.

How to save income tax payment?

Submitting insurance forms, medical expenditure bills, rent receipts and children tuition fees receipt can reduce your tax burden to some extent. But if you plan for tax saving properly you can save even more and most importantly this will help you to reduce your unnecessary financial stress.

Many of us still think that taxes are difficult to avoid, and hence they don’t plan for it or don’t bother to save on it. However, several investments can help you to wipe it out or reduce it like Contribution to NPS, Interest on Home Loan, Sukanya Samriddhi Yojana, ELSS (Equity Linked Savings Scheme), Unit Linked Insurance Plan, Contribution to any Provident Fund setup by the Central Government, Contribution by an employee to superannuation fund, Subscription to National Savings Certificate, Subscription to Notified Bonds issued by NABARD, Tax saving Fixed Deposit, etc.

Are you bothered about payment of tax on sale of any immovable property/ capital asset?

You can plan for certain investment schemes to avoid or minimize the payment of taxes against the sale of any immovable property or any other capital assets and the list of such investment schemes are given below:

• Reinvestment in a maximum of two residential house property against the capital gain from the sale of Long Term Residential House Property.
• Reinvestment in one residential house property against the capital gain from the sale of any other Long Term Capital Asset other than Residential House Property.
• Reinvestment in Urban or Rural Agricultural Land against capital gain from the transfer of Urban Agricultural Land
• Reinvestment into Rural Electrification Corporation bonds or NHAI bonds
• Reinvestment into Specified Units issued before 01.04.2019 by Central Government.